The real estate market in the Greater Toronto Area closed off 2019 on a positive note. Market sales for the year grew by 12.6% in the GTA with the year-to-date total number of home sales at 87,825 for 2019 following 78,015 sales in 2018. The latest report from the Toronto Real Estate Board also showed an increase in home sales across all home types by 17.4% this December in comparison to the same month last year.
Sales Bounced Back in the Second Half of the Year
Michael Collins, TREB’s president, said that the market “saw a recovery in sales activity in 2019, particularly in the second half of the year as many home buyers who were initially on the sidelines moved back into the marketplace starting in the spring.” As 2019 brought upon an increase in average price for homes at $837,788, up 11.9% from 2018, this sets the stage for further price growth in 2020.
With a total sales-to-new-listings ratio (SNLR) of 57.5% for the end of the year, the market was classified as balanced, though it’s leaning closer to a sellers’ market. The City of Toronto, Peel Region, and Dufferin County areas were also revealed to be sellers’ markets with SNLRs of 58.2%, 57.9%, and 69.5%, respectively.
Strong numbers in the 905
Homes in York Region recorded a growth in sales from 590 in December 2018 to 730 sales in December 2019. Vaughan homes for sale saw the most activity with 167 sales, contributing to the 3,311 total transactions in 2019. Newmarket real estate was the frontrunner in the York region with 31 new listings and 66 sales in December giving them the highest SNLR in the region at 51.9%, an increase from its SNLR of 36.6% last December.
As a whole, the 905 area, comprised of the York, Peel, Durham, Halton, and Simcoe markets, displayed the strongest growth in sales with a 19.4% increase. Year over year, this area showed the greatest growth in total sales for detached homes at 23% from 2018 to 2019. Townhouses also grew to be increasingly popular in the 905 with 546 sales in December. The York Region represented more than half of the total home sales in the GTA during the month of December at 2,700 of the 4,399 residential sales.
Looking ahead for 2020: Lack of Supply a Growing Concern
Heading into 2020, there is still the ongoing concern of the supply of homes, or lack thereof, available to the increasing buyer demand. Should this trend continue, TREB mentions that it will only draw an even bigger increase in price, leading to “the same unsustainable levels that led to government intervention in 2017 and 2018,
Concerns brought upon by policy makers, varying research groups, and other interested parties delivered efforts made to slow down home buyer demand. This took a toll on the GTA market as it struggled adjusting to new provincial legislations and the federal mortgage stress test. TREB’s Chief Market Analyst, Jason Mercer said that “the lack of a diverse supply of ownership and rental housing continues to hamper housing affordability in the GTA … we experienced a strong sales increase up against a decline in supply.” He continued to say that we can “expect further acceleration in 2020 if there is no relief on the supply front.”
However, as previously mentioned, the surge in sales activity displayed in the second half of the year indicates that the real estate market in the Greater Toronto Area is making strides in the right direction as it slowly recovers. This positive trend in sales activity from 2018’s slow moving market to 2019 shows greater potential for the future.
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